German authority fines Maxxis, two distributors over tire price-fixing

Cologne, Germany – Germany's Federal Cartel Office (Bundeskartellamt) has imposed fines totalling €11.9 million on Maxxis International GmbH and two tire wholesalers for engaging in “vertical price-fixing” involving Maxxis and CST brand tires.

The fines were imposed on Maxxis, Best4Tires Berlin GmbH (B4T Berlin), Reifen Mueller GmbH & Co. KG, as well as an individual held responsible, the office announced 21 July.

According to the competition authority, Maxxis, the sole German importer of tires made by Taiwan's Cheng Shin Rubber Ind. Co. Ltd, entered into agreements with wholesalers that "restricted pricing" in the German tire wholesale market.

The investigation began after another wholesaler disclosed the arrangements to the Bundeskartellamt and cooperated with its investigation.

According to the Bundeskartellamt, Maxxis entered into so-called "margin guarantee agreements" with Berlin Tyre, the legal predecessor of B4T Berlin, and Reifen Mueller at the turn of 2015/16 after coming "under economic pressure" from the two wholesalers.

The agreements guaranteed distributors a minimum margin on every Maxxis and CST tire sold.

The companies shared a common understanding that wholesalers would not act as "price leaders" but instead adopt a "defensive" marketing strategy, particularly on the Tyre24 online trading platform, the authority said.

Maxxis later concluded similar agreements with nine other tire wholesalers.

The Bundeskartellamt also said Maxxis established a "price moderation system."

The system, said the authority, was based on "recommended resale prices (RRPs), continuous monitoring of actual selling prices – particularly on the Tyre24 online platform – and systematic intervention whenever Maxxis deemed prices too low."

This process, the Bundeskartellamt explained, was facilitated by the fact that companies could be registered on Tyre24 as both suppliers and buyers during the relevant period.

Through a buyer account, they could view suppliers, stock levels, and sales prices for each tire at a glance.

Following the launch of the investigation, Maxxis discontinued the price moderation system and terminated its remaining margin guarantee agreements in July 2024.

"Vertical price-fixing agreements tend to put consumers at a disadvantage as they often lead to excessive prices," said Bundeskartellamt president Andreas Mundt.

The authority "vigorously prosecutes such practices," he added, noting they have been prohibited in Germany since the early 1970s.

"Agreements guaranteeing distributors a certain margin violate competition law if, as here, they contain provisions on distributors' selling prices, thereby restricting their freedom to set prices," Mundt said.

The authority said B4T Berlin and Reifen Mueller were also fined because they had insisted on the margin guarantee agreements and benefited from them through "substantial compensation payments."

In setting the penalties, the Bundeskartellamt said it took into account the cooperation of Maxxis and B4T Berlin during the investigation. Maxxis and Reifen Mueller also agreed to a settlement.

The penalty notices are not yet final and may be appealed before the Düsseldorf Higher Regional Court.